The Australian dollar has staged a solid recovery against the US dollar, after the pair recently found support from the 0.5500 level.
AUD/USD analysis indicates that the pair could continue to recover higher while price trades above key trendline support, around the 0.5840 level.
AUD/USD medium-term price trend
The Australian dollar is recovering higher against the US dollar after the Federal Reserve announced a massive QE programme on Monday.
AUD/USD technical analysis highlights that the pair has moved back inside a falling price channel on the daily time frame.
The daily time frame shows that the AUD/USD pair could recover over the medium term while price holds above the bottom of the price channel, around the 0.5840 level.
The AUD/USD pair also bounced after finally reaching the implied bearish target of a head-and-shoulders pattern on the daily time frame, around the 0.5500 level.
With the implied bearish target hit, and the US dollar starting to weaken, a major technical bottom may have been formed.
AUD/USD short-term price trend
AUD/USD technical analysis highlights that the pair has a bearish bias while price is trading below the 0.6000 level.
The one-hour time frame is currently showing that the AUD/USD pair is now working inside a rising price channel.
The top of the price channel is found at the 0.6080 level and remains a valid bullish target if price trades above the 0.6000 level.
The bottom of the rising price channel is found around the 0.5970 level. A break under the channel could see the 0.5650 level tested.
AUD/USD technical summary
AUD/USD analysis shows that the pair has fallen to its medium-term bearish target. A recovery is now under way and could target the 0.6080 level over the short-term horizon.